What an AVS Mismatch Is and How to Fix It

Address verification service (AVS) is a fraud prevention measure used by merchants that accept credit or debit cards. AVS compares the billing address provided by the customer with the address on file at the card-issuing bank. If the addresses do not match, the transaction may be declined to help prevent fraudulent activity.

This helps to ensure that the person making the purchase is actually the cardholder and not someone attempting to use the card illegally. Read on to learn more about AVS mismatches, how to tell if they indicate fraud, and how to fix them.

What Is the Purpose of an AVS?

An AVS mismatch arises when a billing address is entered into a payment processing system but does not match the address on file with the card-issuing bank. This mismatch can cause a transaction to be declined as the bank will presume that the purchase is being attempted with a stolen or counterfeit debit or credit card. In most cases, AVS mismatches can be resolved by contacting the card issuer and updating the billing address on file.

Are AVS Mismatches Indicative of Fraud?

AVS mismatches can indicate fraudulent activity if the discrepancies are significant and not attributable to innocent causes.

Although, merchants should understand that not all AVS mismatches indicate fraudulent activity. There are also many innocent explanations for AVS mismatches, such as:

Out of date billing addresses

Cardholders that have recently moved from one residence to another often forget to update their details with their financial institute. This results in a discrepancy between billing addresses, leading to an AVS flagging a legitimate transaction.

Supported countries

AVS is not supported by countries outside of the US, UK, and Canada. This can lead to cards that have been issued outside of these three countries being flagged by AVS.

Multiple cards or addresses

A cardholder with multiple credit or debit cards and/or residing in multiple residential locations can also lead to an AVS flagging a non-fraudulent transaction.

Fixing an AVS Mismatch

When a transaction is flagged by AVS, there are four courses of action they can take, which are:

  1. Retry the transaction.
  2. If the customer is somebody you know and trust, merchants can override the AVS mismatch and payment system.
  3. Reach out to the customer’s financial institution to verify their identity.
  4. If many legitimate transactions are being flagged, merchants can contact their payment processor and rework their AVS thresholds.

AVS Filters Assisting in Fraud Protection

AVS filters are one avenue of fraud protection that businesses can use to help combat nefarious activities. While they are not a cure-all, they can be a valuable asset in a business’ anti-fraud arsenal. Some of your customers may be flagged as fraudulent by AVS filters, but this does not mean that they are not legitimate customers.

For more than understandable reasons, some customers may have their cards flagged. So instead of turning well-meaning cardholders away, why not use the strategies detailed here to turn an AVS mismatch into a legitimate purchase? Both your customers and your bottom line will thank you for it.